Tower reports $33M Q3 net loss

By Ann Steffora Mutschler, Senior Editor -- Electronic News, 11/6/2007

Migdal Haemek, Israel-based semiconductor foundry Tower Semiconductor Ltd. today reported that revenue for its Q3 ended September 30 was $56.6 million, up 10 percent year-over-year from $51.5 million in Q3 2006.

For the nine months ended September 30, revenue was $169.2 million, 28 percent higher over $131.9 million for the same period last year.

GAAP net loss for Q3 was $33.4 million, or 27 cents per share, compared to net income of $39.5 million, or 46 cents per share, in the same period one year ago, which included a one-time restructuring gain of $80.1 million. Excluding the restructuring gain, Q3 net loss improved by $7.2 million from $40.6 million in Q3 2006.

Tower CEO Russell Ellwanger remained positive in a statement, “During the third quarter we continued to achieve positive EBITDA and positive cash flow from operations. The recent win of a high-volume bid for Fab 2 from a first tier U.S. IDM should be the most significant manufacturing contract that has been secured during my time with the company.”

“With the new tools that we recently purchased, originating at companies such as AMD and Intel, we will be able to fully satisfy our current customers’ demand which currently exceeds our capacity as well as begin to satisfy this new high-volume contract. Our fourth quarter customer demand is strong and we look forward to achieving the financial milestone of a quarter of a billion dollars revenue on an annual basis while implementing our plans to improve bottom line performance,” he added.

Looking ahead to Q4, Tower expects revenue to range between $61 and $65 million, representing midrange sequential revenue growth of 12 percent.

As a result, Tower expects its fiscal 2007 revenues to be between $230 and $234 million, representing midrange annual revenue growth of 24 percent over 2006 revenues.